Recent regulations covering unsolicited share offers have led to a fall in the number of complaints about "low-ball" offers, the Financial Markets Authority says in a report published today.

The Securities Markets (Unsolicited Offers) Regulations came into force in December 2012.

The regulations required those making unsolicited share offers to disclose the recent market price or the fair value of shares as well as the payment terms. The regulations also introduced a 10-working day "cooling off" period, during which people who accept offers can cancel their contracts without loss.

While the number of unsolicited share offers was still significant, a drop in the number of complaints to the FMA showed the regulations were helping investors to make more informed decisions about such offers, the FMA said.

The report found investors with large share holdings were less likely to accept unsolicited offers than those with small holdings. Offers well below shares' market price also appeared to be less likely to be accepted.

However, some investors continued to accept low-ball offers despite being able to get more for their shares by selling through a broker, the FMA said.

In some cases the difference between the offer and market value was "substantial".

Before the regulations the activities of David Tweed and Bernard Whimp and associated entities had caused "particular concern", the FMA said.

In 2011 the High Court in Wellington issued a judgment that Whimp had used a "misleading and deceptive mechanism" to convince shareholders to accept offers which were "significantly" below the market value.

Whimp had sent offers to more than 100,000 investors in six major NZX-listed companies, which appeared to be at a healthy premium to the market value, urging shareholders to "act now if you wish to accept".

However, the fine print revealed that the payments would be made over nine years. More than 1100 investors, accounting for shares worth $7.2 million, accepted the offers.

Australian company Stock & Share Trading,owned and controlled by John Armour, was particularly active from 2010 to 2012, making many offers that generated a significant number of complaints and queries to the FMA.

The FMA said it was aware of only two companies that have made unsolicited offers under the new regulations. These were Washington Securities and Zero Commission NZ, which both made regular offers throughout 2013.

Zero Commission offers are typically at a discount of about 10 per cent to shares' market price and are targeted at investors with relatively small holdings.

Washington Securities' offers to a wide range of shareholders were made at discounts of between 25 per cent and 75 per cent of the market price.

The FMA said it was aware of 521 acceptances for all offers made by Washington Securities, representing a discount to market value ranging from about $225 to $1154 per investor.

However, Washington Securities had since said it would stop doing business in New Zealand and was removed from the Companies Register on February 12, the FMA said.

Shareholders Association chairman John Hawkins said he was encouraged by the findings of the report.

But the association did not want low-ball offers to become "outright illegal" because they sometimes allowed shareholders to dispose of small parcels of shares that would otherwise be unmarketable, Hawkins said.